Canada’s farm minister highlighted on Monday the global marketing reach of Swiss-based Glencore International PLC in the latest sign from Ottawa that it has little appetite for blocking the company’s proposed takeover of grain handler Viterra Inc.
Canada is one of the few countries that can help meet growing global demand for food, which is set to increase by 50 to 70 per cent in coming decades, Agriculture Minister Gerry Ritz told reporters when asked to comment on the Glencore bid.
“It’s going to take trade at the global level to make that happen. Certainly companies like Glencore have different avenues of marketing than Viterra has,” he said on a conference call from South Korea, where he is on a trade mission.
Mr. Ritz said Viterra, the country’s biggest grain handler, itself has operations in several countries and is “not simply a Canadian company either.”
Glencore’s $6.1-billion offer for Viterra must win approval from the federal government before it can go ahead. Under Canada’s foreign investment rules, the Industry Minister must determine whether the deal would produce a “net benefit” to Canada, according to a loosely defined set of criteria.
Prime Minister Stephen Harper said on Sunday the structure of the deal meant it should not necessarily be seen as a normal foreign takeover bid. He said the interest in expanding the Canadian agriculture sector was “a good thing.”
As part of its deal, Glencore plans to sell off some parts of Viterra to Canada’s Richardson International Ltd. and Agrium Inc.
The Conservative government is eager to show it is open to business after it surprised investors in 2010 by blocking BHP Billiton Ltd.’s 2010 attempted takeover of Saskatchewan-based fertilizer producer Potash Corp. of Saskatchewan Inc.
Saskatchewan Premier Brad Wall, who was instrumental in opposing the sale of Potash Corp., has also shown less concern about Viterra, which has its head office in the province, saying it was not a strategic resource.
The Competition Bureau will also study the deal to see if it lessens or prevents fair competition in any market.